Lower interest rates also tend to be good for corporate profits, which can cause the stock markets to rally as well.
High-quality bonds can play many parts on the stage of investing. At times, they play the part of the hero to rescue investors’ dollars from the dangers of the stock market. At other times, they are the common man, working from day to day to make their small contribution to the community (portfolio).
This past week, high-quality bonds were at the top of our bond list, with the Barclays U.S. 20+ Year Treasury bond index gaining 2.02 percent over the past five trading days and up 7.04 percent over the past three months.
Inflation-protected U.S. Treasury bonds were second on our list with the Barclays U.S. Treasury Inflation Protected Securities index gaining 0.95 over the past week.
This article was written byLaif Meidell, CMT, president of American Wealth Management, and portfolio manager of the AdvisorShares Meidell Tactical Advantage ETF (MATH) and originally published in the Reno Gazette-Journal. Performance numbers used in this article were obtained through eSignal and are not guaranteed to be accurate.